Digital Tax: Chile

Law 21210 of February 24, 2020 in its article 35 A of the new paragraph 7 bis of the Law on Sales and Services Tax establishes that taxpayers not domiciled or residing in Chile that render services taxed according to the new letter n) of Article 8 of the Law on Sales and Service Tax, that is:

1. The intermediation of services provided in Chile, whatever its nature, or of sales made in Chile or abroad provided that the latter give rise to an import;
2. The supply or delivery of digital entertainment content, such as videos, music, games or other analogues, through download, streaming or other technology, including for these purposes, texts, magazines, newspapers and books;
3. The provision of software, storage, platforms or computer infrastructure; and
4. Advertising, regardless of the medium or medium through which it is delivered, materialized or executed.

That they are used in the Chilean national territory by individuals who are not taxpayers of said law, will be subject to the simplified tax regime that the same paragraph regulates and must register at the link:

http://www.sii.cl/vat/index.html

• To enroll in this regime, and only for tax purposes, taxpayers must fill out the “Simplified Taxation Regime Registration Form” that will be available in the “Registration” menu of the VAT Digital Services Portal (hereinafter, the “Portal” ) that the Internal Revenue Service will enable on its website (sii.cl) and whose content will be displayed in English and Spanish.
• When registering, taxpayers must specify which one or which of the services established in numerals 1 to 4 of the new letter n) of article 8 of the Law on Sales and Service Tax will provide.
• The taxpayer may choose whether the tax period for which he must declare and pay the Value Added Tax will comprise one (monthly) or three months in a row (quarterly).
• The taxpayer must also choose the currency in which they will file and pay the tax, in the terms defined by the Service through a Resolution issued for this purpose.
• The option for the election of the tax period, as well as the option of the currency in which the declaration and payment will be made, will be displayed in the form indicated in letter a). Once each option is exercised, it cannot be modified until January 1 of the business year following that in which the respective option was exercised.
• Once the Form is completed and sent, the SII will verify the validity of the email address provided, sending you an email notification that will contain a verification code to validate your email address. After verification, you will receive your User Number and, at the same time, you will be able to create your Password, with which you will be able to authenticate your access to all the Portal’s features.
• The foregoing will come into effect on June 1, 2020. Notwithstanding the foregoing, since the Internal Revenue Service enables the Portal on its website (sii.cl), taxpayers not domiciled or resident in Chile who provide the services referred to in this resolution, may initiate the procedures to enter the simplified tax regime.
• Taxpayers will have a term to register until the date of declaration and payment of the Value Added Tax accrued in the first tax period, that is, until the 20th of the first month following said tax period.

Consequently, the aforementioned companies that provide the services described from abroad must register in the registry mentioned in the preceding paragraphs and submit their corresponding tax return within the selected period.